Consumption of cocoa, often seen as one of the last comforts to go in a recession, looks set to take a knock as consumers in emerging markets bear down on expenses during the global economic downturn.

Hard evidence of a decline in demand should be provided this week with the first quarter grind in Germany scheduled to be released and set to show a year-on-year fall of about 20 per cent, traders and analysts said.

Grindings of cocoa beans are closely watched as they indicate demand anticipated by processors.

Germany supplies large volumes of semi-finished cocoa products to chocolate and confectionery industries in east Europe and Russia and the economic crisis has seriously reduced exports to these regions, traders said.

Last year, Germany’s annual cocoa grind was 367,177 tonnes, more than one-quarter of the 1.38 million tonnes reported by the European Cocoa Association whose data covers most of the processing industry in the European Union and Switzerland.

“A lot of (recent) demand growth has come from eastern Europe and Asia and the economic downturn has taken a toll in terms of people’s consumption habits,’’ said Barclays Capital analyst Sudakshina Unnikrishnan.

The International Cocoa Organisation forecast last month that cocoa grindings in Asia and Oceania would fall by 10 per cent to 719,100 tonnes in the crop year to September because of the global economic slump.

“In the emerging markets, consumers are much more sensitive to the economy and they’ll do without chocolate.

“It’s not ingrained in their culture in the same way,’’ said analyst Judy Ganes-Chase of J. Ganes Consulting in New York.

Investment bank Fortis, in a report issued last week, cut its forecast for total global cocoa grindings in 2008/09 to 3.54 million tonnes, down from a previous estimate of 3.61 million and well below the prior season’s 3.69 million.

This was followed by years of demand growth, when the premium chocolate market grew and cocoa prices were lower. Ms Ganes-Chase said she expected the first quarter US cocoa grind to be lower. Some traders forecast the decline could be between seven and 10 per cent, year-on-year.

She said there had also been an increase in grindings in producing countries as they seek to retain more of the value from their cocoa output.

The grind in Africa is pegged at 25.7 per cent higher in 2008/09 compared to 2007/08.

“Looking at the quarterly grind numbers, say for the US or for Europe, doesn’t tell the full story because grind at origin has been increasing at a faster pace,’’ Ms Ganes-Chase said.

Analysts said, however, consumption should start to move higher again when the global economic outlook improves.

Fortis forecast total grindings should rise to 3.71 million tonnes in 2009/10, noting “prospects for the current recession lasting beyond 2009 are becoming more remote by the day.”